Scandinavia and Good Government

by Tor Dahl

Curiously, Scandinavia, characterized as socialist, are currently governed by conservatives. I doubt whether any of them dreams about changing the programs for free education and health care. Together they deliver healthcare better than we do in the US (better outcomes and at half the cost) and free world class education. The combination of Scandinavian universal health insurance and free education for all has caused the rapid upward movement in income classes in the work force. And it has created unexpected wealth.

But the intriguing experiments of mandating both genders' participation on corporate boards, as well as mandated union representation for the same boards have largely led to labor peace, and high productivity in the work place. When labor and management end up "in the same boat" free enterprise functions better, and understanding what it takes to succeed in a competitive economy must be shared by all for good decisions to be reached.

What about taxes? The share of taxes as a percentage of the GDP is the same for Norway and the US. But like post WW2 US, progressive tax rates in Norway are higher than in the US, yet total tax payments add up to the same number. Under Truman marginal tax rates reached 92%, and the US enjoyed record growth in GDP. The War debt, the GI Bill and the Marshall Aid to Europe were all paid off in 18 years. Norway makes all tax payments public--anyone can look up taxes paid by any citizen, and any corporation, which pretty much takes away the temptation to cheat.

Any system of government can be improved, and Scandinavians constantly argue about how to improve their welfare states, making government service better and more efficient, and ensuring that wages remain competitive and inflation kept at bay. No political party has ever advocated closing down the government in order to force their specific priorities on the majority. The presence of many parties forces cooperation and compromise, and avoids dramas around the raising of debt ceilings.

If people in any country feel free, safe and justly treated the economy will benefit maximally. Amazingly we can predict the per capita income of any country if we know the degree to which people are free, safe and justly treated, and we can predict their per capita income with 96% accuracy. If a system of government robs us of freedom, safety and justice, we shall immediately suffer the consequences of such neglect, and it will cost us dearly.

And THAT is why good government is important.